The brief questions and answer session addressed the problems with foreclosure. The panel identified that the main problem was political in nature as borrowers should be kept in their homes for obvious reasons. California has created several barriers for foreclosure. Furthermore, the panel reached a consensus that the one-off documentation problem was not the cause of the foreclosure crisis. Indeed, the panel highlighted the issue of uncertainty over the authorization of public records as well as the quality or lack thereof of loans.
In addition, the panel addressed whether there is a benefit to synchronizing loans. It was concluded that there is indeed a benefit and that this hasn’t been a controversial issue in most states. It has been clear that the mortgage follows the note and there is no need for mortgage assignments. However, the interpretation and application of law is changing under lenders who are trying to foreclose.
Prof Wallace, highlighted that right now there is no house price index – representing what is actually happening in the marketplace. Hence making the data incredibly expensive to obtain. Mr. Platt, however emphasized that if the goal was never to foreclose – then why not a have an unsecured loan? On being questioned on enormous costs of foreclosure and therefore need explore alternative, Platt responded that foreclosure is a rare occurrence